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LSEG (London Stock Exchange Group) Deals Intelligence has revealed that the value of UK takeover and merger deals dropped to its lowest level since the financial crash in 2009.
LSEG said that mergers and acquisitions (M&A) including UK firms or funds totalled $265.4 billion dollars (£207.6 billion) throughout this year due to the gloomy economic backdrop.
This is a 33% slump in M&A compared to the same period in 2022 and it is the lowest since 2009, whilst the decline has been blamed on geopolitical tensions and higher interest rates.
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In 2023 there was just 5,500 M&A deals which is down by 19% compared to 2022, valuations of companies were also lower due to the economy.
However, private equity firms throughout 2023 completed $41.4 billion (£32.4 billion) of M&A deals.
Lucille Jones, senior manager at LSEG Deals Intelligence, said: “Steeply rising interest rates and a concerning outlook for the UK economy, combined with stricter antitrust enforcement and ongoing geopolitical tensions curbed the appetite for deal making in 2023.
“M&A involving UK companies declined 33% to the lowest level in 14 years, with double-digit percentage declines for both the domestic and cross-border deal categories, and across all sectors.
“On a positive note, the year ended more strongly than it began, and with inflation coming down and rates normalising, it could give CEOs and boards a little more confidence with which to plan their moves in 2024.”
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